Promotion Recession. Productivity on the Decline. Digital Nomads.

Have you heard of the so-called ‘promotion recession’? One of the many 2024 labor trends has been the reduction in promotions. ADP data shows the reduction in promotions which not only impacts upward trajectory for those aiming to go up the ladder, but also has a knock-on effect for less entry-level jobs being available for new entrants. As you can see in the data, when extrapolating average promotion rate chart out – factoring in LinkedIn data, Bureau of Labor Statistics (BLS), and other data sources – the decline will continue for the next few years. ?

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Despite the promotion rate going down, companies still need to find attractive means to keep workers happy. Otherwise, the other ‘down and right’ line we should expect to see is overall headcount. Here’s a recent guide including the top 20 strategies to provide career paths and increase retention, which gives some great ideas. ?

The other way to think of things is if you can’t get that promotion how about just doing less?!... ??

More and more ‘research’ and anecdotal evidence suggests that companies should move to a 4-day week, or if you read/listen to Tim Ferriss he even advocates for a 4 HOUR work week! Some of the recent LinkedIn musings had me do some digging into productivity metrics. In Q2 2024, Bureau of Labor Statistics?data showed a 2.3% increase in productivity over the past quarter. Now let’s track that back a few more years. Worker productivity in the U.S. has shown fluctuations due to a combination of factors such as the pandemic, shifts in work environments, and economic conditions. Here’s a breakdown of the trends:?

1. Initial Productivity Surge (2020)?

During the onset of the COVID-19 pandemic in 2020, there was an unexpected surge in worker productivity. As companies rapidly transitioned to remote work, many workers initially experienced fewer distractions, leading to an increase in output. The BLS reported significant productivity growth during the early months of the pandemic, with nonfarm business sector labor productivity increasing by 2.5% for the year.?

2. Decline in Productivity Growth (2021)?

By 2021, the initial productivity gains began to wane. Burnout and stress, supply chain disruptions, and a tightening labor market saw productivity metrics slow to 1.9%. You all will remember the “Great Resignation” taking hold during this time. ???

3. Continued Challenges and Stagnation (2022-2023)?

In 2022 and 2023, productivity continued to face challenges, and in some quarters, it even declined. Hybrid work models started to find their feet, initially resulting in struggles around balancing employee engagement and productivity. The rollercoaster ride of global markets took a big dip during this time, leading to ongoing economic uncertainty. Finally, the emergence and rapid deployment of new technologies left some companies in the rear-view mirror trying to catch up with the market leaders. BLS data during this time showed the largest productivity decline of 2.1%.?

Current Outlook?

As of mid-2024, there are signs that productivity may stabilize or potentially improve as companies continue to adapt to new work environments and technologies. However, this will largely depend on how organizations manage the hybrid work transition, address worker well-being, and integrate productivity-enhancing technologies.?

Not wanting to be all doom and gloom this week – showing everything on the decline, I’ll wrap with some interesting data showing a pleasant increase. ??

Working differently, and even working in a different location altogether has been wildly successful for many, and more and more workers are embracing this. MBO just released their 2024 Digital Nomads report – which shows that 1 in 10 American workers consider themselves a digital nomad. The data shows that not only are they increasing in volume, but they’re also increasing in satisfaction. More flexible employers, an increasing shift to project-based work, and the continuing advancement in technologies to enable connectivity are surely the key contributors to this rise. ? ?

Stat of the Week?

51% of digital nomads plan to travel exclusively in the U.S., on average visiting 6.6 different locations. ?